Synchrony Financial · NYSE:SYF
Synchrony Financial — Q4 2021 Earnings Presentation
18 slides from Synchrony Financial's earnings presentation, Jan 28, 2022
Slide 1: 4Q'21 Financial Results
4Q'21 FINANCIAL RESULTS January 28th, 2021
Slide 2: Disclaimers
Disclaimers Cautionary Statement Regarding Forward-Looking Statements The following slides are part of a presentation by Synchrony Financial in connection with reporting quarterly financial results. No representation is made that the information in these slides is complete. For additional informatio
Slide 3: 4Q'21 Financial Highlights
4Q'21 Financial Highlights SUMMARY FINANCIAL METRICS CAPITAL $1.48 15.77% 15.6% DILUTED EPS NET INTEREST MARGIN CET1 compared to $1.24; compared to 14.64% liquid assets of $13.0 billion, $0.14 increase from reserve 13.6% of total assets reductions for HFS portfolios $85.1 billion 2.37% $62.3 billion
Slide 4: 4Q'21 Business Highlights
4Q'21 Business Highlights (d) BUSINESS EXPANSION CONSUMER PERFORMANCE DIGITAL New Accounts (a) 20% ~65% DIGITAL PAYMENTS* *4Q21 % of Total Payments Purchase Volume per Account (b) ~55% DIGITAL APPLICATIONS 13% (c) ~35% MOBILE CHANNEL Average Balance per Account APPLICATIONS (2)% ~40% ONLINE SALES* *
Slide 5: 2021 Year In Review
2021 Year In Review GROW & DIVERSIFY DELIVER GENERATE WIN NEW PROGRAMS, BEST-IN-CLASS STRONG PARTNERS PRODUCTS & CUSTOMER MARKETS EXPERIENCES FINANCIAL RESULTS $4.2 billion 36 ~25 million NET EARNINGS NEW PARTNER NEW ACCOUNT DEALS ORIGINATIONS 4.5% ROA DRIVING 38 $166 billion VALUE PARTNER RENEWALS
Slide 6: Financial Results
Financial Results Summary earnings statement 4Q'21 Highlights B/(W) • $813 million Net earnings, $1.48 diluted EPS $ in millions, except per share statistics 4Q'21 4Q'20 $ % – $98 million reserve reductions related to HFS portfolios, or $74 million after-tax, $0.14 EPS Total interest income $4,053 $
Slide 7: Growth Metrics
Growth Metrics Purchase volume 18% Loan receivables (1)% $ in billions $ in billions $44.0 $39.0 $77.0 $74.5 $80.5 $76.3 4% $33.5 Dual Card / Dual Card / $15.1 $19.6 30% $19.5 $21.4 10% Co-Brand Co-Brand(b) Average active accounts 5% Interest and fees on loans 2% in millions $ in millions 59.4 62.1
Slide 8: 4Q'21 Platform Results
(a) 4Q'21 Platform Results Loan receivables $ in billions Home & Digital Diversified & Health & Lifestyle Auto (b) Value Wellness 3% 6% 2% 7% 7% 4Q'20 4Q'21 V% 4Q'20 4Q'21 V% 4Q'20 4Q'21 V% 4Q'20 4Q'21 V% 4Q'20 4Q'21 V% Purchase $9.7 $10.9 13% $11.0 $13.5 22% $1.4 $1.5 6% $11.3 $14.2 26% $2.7 $3.1 1
Slide 9: Net Interest Income
Net Interest Income Net Interest Income 5% 4Q'21 Highlights $ in millions % of average interest-earning assets • Net interest income increased 5% – Interest and fees on loans up 2% driven by higher average loan receivables partially offset by lower yield – Interest expense decrease attributed to low
Slide 10: Asset Quality Metrics
Asset Quality Metrics (a) 30+ days past due Net charge-offs $ in millions, % of period-end loan receivables $ in millions, % of average loan receivables including held for sale (b) (c) 90+ days past due Allowance for credit losses $ in millions, % of period-end loan receivables $ in millions, % of p
Slide 11: Other Expense
Other Expense Other expense $ in millions 12% 4Q'21 Highlights • Other expense up 12% – Higher other expense includes $75 million related to asset impairments and certain incremental marketing investments – Employee cost increase of $62 million attributable to higher hourly wages and higher incentiv
Slide 12: Funding, Capital and Liquidity
Funding, Capital and Liquidity (a) Funding sources Liquidity $ in billions $ in billions Unsecured V$ Securitization $(0.8) $(0.5) Deposits $(0.5) V% Deposits 80% 81% +1 pts. Liquid assets $18.3 $13.0 Undrawn credit facilities 5.4 2.7 Securitization 10% 10% 0 pts. Total liquidity $23.7 $15.7 Unsecur
Slide 13: 2022 Outlook
2022 Outlook (comments and trends in comparison to 2021, except where noted) Key Driver Full Year Framework • Continued strength in Purchase Volume across all sales platforms Purchase Volume • Anticipate moderation as consumer savings rate and payment rate declines • Generally consistent with 2H’21
Slide 14: 4Q'21 Key Business Themes
4Q'21 Key Business Themes (a) Executing our strategy Generating strong growth • Grow & Win Partners: 74 deals and • Record Purchase Volume of $47.1 billion, renewals in 2021 +18% • Diversify Markets: Health & Wellness • Originated 7 million new accounts, +20% expansion including Allegro acquisition
Slide 15: Footnotes
Footnotes References in this presentation to “HFS” are to Loan receivables held for sale 4Q'21 Business Highlights | slide 4: a. New Accounts represent accounts that were approved in the respective period, in millions. b. Purchase Volume per Account is calculated as the Purchase volume divided by Av
Slide 16: Synchrony - Changing What's Possible
»/" synchrony CHANGING WHAT’S POSSIBLE
Slide 17: Non-GAAP Reconciliation
Non-GAAP Reconciliation The following table sets forth the components of our Loan receivables for the periods indicated below. $ in millions At December 31, Total CORE LOAN RECEIVABLES 2020 2021 Loan receivables $81,867 $80,740 Loan receivables held for sale 5 4,361 Loan receivables including held f
Slide 18: Non-GAAP Reconciliation Continued
Non-GAAP Reconciliation Continued* The following table sets forth the components of our Tier 1 Capital + Reserves ratio for the periods indicated below. $ in millions At December 31, Total 2020 2021 Tier 1 Capital. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .